Anybody have any information on how Brexit might affect this company? I've been reading that British based companies will suffer the most, plus SSTY were planning to expand into Europe. Surely that is going to be more costly now? No ramping please... just good honest opinions would be appreciated.

Read Northland's note on Safestay (SSTY), out this morning, by visiting www.research-tree.com
The business generated £4m (£1.9m) of revenue and increased beds from 560 to 1,526 to December 2015. Loss before tax of £0.6m as the business put in place infrastructure to support growth. The group consists of three freehold properties valued at c. £29m and an interest in a leasehold property at £12.7m. NAV per share increased to 48p in FY15. Two hostels were added in FY15 in London (Holland Park) and in Edinburgh toward the backend of FY15 so business has not had a full year of benefit from the two new hostels. Business doubled in size in FY15, though did not see the benefits of a full year of trading from Holland Park and Edinburgh which will be the case in FY16. Management seeks to double the size of the business again in FY16 and has appointed Philip Houghton as CEO and Mark Beveridge (former InterContinental Hotels Group) as FD to help support the senior management team in its preparation to accelerate growth into key European cities 

Dodged this bullet. Down from 70p to 56p since my last posting. Think I'll wait and see how Holland Park does before putting any more money in here. Slightly less optimistic about that one than before.

They have inferred twice now that expansion is on the way in 2015 and with the RNS today indicating a name change from co.uk to com I feel a deal or multiple deals will soon be announced. Normally a good thing but looking at the accounts, it's clear SSTY don't have the cash to finance these, and I don't think they'll go the debt route as the last placing was partly done to reduce debt, and so I think it's 99% certain some pretty heavy dilution could be coming shareholders way. If it's just one property they're buying, the dilution could 'only' be about ten per cent but I think the new CEO is keen to roll out the brand as much as possible and thus I would guess a few different properties are being looked at. Placing could be huge and priced substantially below these levels IMO.

I like the business model (although it's nothing new) and believe the company is well run and tapping into a lucrative market.

I'm not sure if Holland Park will be a winner or not. The location is good but the leasing price will be very high and the pound is strong right now, meaning less tourists to the capital. I've noticed the opening at Holland Park has slipped from early summer to August. Anyone know why? Maybe renovation took longer? The RNS says that they will "have circa 1000 beds once refurbishments are complete" - er, aren't they finished yet or is this old text?

I'm going to wait and re-appraise the situation. Right now it's a risky hold due to the high probability of a placing to fund the expansion plans which isn't something anyone seems to be talking about? Not least the share mags who have been tipping this share??

I have re-assessed the value potential here since the recent Holland Park acquisition and £3.3 million share placing.

The current SP is up around 33% since the IPO at 50p (from EY stats out of 92 IPOS in 2014  only 16 are trading at 30% over IPO price so we are certainly one of the best performers in this space). The market cap has increased by around 50%.

Total shares in issue prior to December placing) 13,217,246
New shares issued as result of placing 22 December 2014 6,027,272

I know that SSTY state that they wish to be ambitious in acquiring new hostels,  but I would prefer to see location over quantity. I believe its a good growth strategy to mix the owned properties with the leasehold ones at this stage too.

I see the Holland Park (380 beds) aquisition as being very complimentary to the Elephant and Castle property (413 beds), especially as E and C gains momentum with its reputation and Safestay with its brand development.

I note from the information available on the previous hostel the ex. YHA building at Holland Park House, is a very attractive grade 1 listed Jacobean building with gardens. Its a five minute walk from Kensington High Street, Royal Albert Hall, Kensington Palace and the main museums. Its also easily accessible from Paddington via circle line for overseas visitors.

I have made an annual cash generation estimate based on the fixed costs at E and C.

The above annual cash generation I see for Holland Park within 2 years.
Clearly with largely fixed costs  all occupancy and price increases fall directly to the bottom line, so the potential could easily improve significantly (this applies to all properties so any small price increases have larger impact on profitability).

I am very encouraged by the rapid progress made since IPO and see increasing catalysts for accelerated growth.

I have viewed the property and I have subsequently invested. Believe the press coverage, it is undoubtedly welcoming and very well operated (front and back of house).

All the essential detail is in the admission document, but for me there are a number of very attractive key investment points here:

Firstly the investment is completely asset backed by the property itself Grade 11 Listed Building (former labour party headquarters) , bought for £3.8m in 2011 4.5 million spent on conversion to a 74 rooms/413 beds hostel (which range from 2 bed private rooms to 8 bed dormitories). Post conversion and 2nd year operating as a hostel the independent market valuation is 12 is £12,200,000.

This, on its own, makes a very compelling proposition vs the current market cap (calculation below):

Current in issue:
Shares issued from 4.8 million placing 9,600,000
Number of shares to be issued to Safeland shareholders 3,617,246
Total shares in issue 13,217,246

Market cap 13217246 x 0.61 (mid price today) 8,062,520 GBP

Prior to looking at this investment, I had not realised the key definition of a hostel vs a hotel- which essentially involves the sale of beds vs rooms. A few quick calculations would reveal that the income generated from 413 beds at low hostel rates is higher than a typical budget hotel selling 74 rooms.The positioning is dormitory style accommodation of better quality than that of traditional hostels and at more attractive rates than budget hotels.

In addition to traditional hotel clients, in recession recovery , travel budgets, even business ones, are likely to remain under pressure and the budget hotel space remains the highest projected growth sector for the near future.

The independent valuation also notes that the most likely aquirer would be another owner/operator. However, as I understand it, Safestay are ambitious and looking to roll out the brand to further locations in London and possibly key destinations overseas.

A dividend would be possible from this kind of return, however, I understand the main objective is seeking to achieve capital growth for Shareholders.

There is very strong list of shareholders institutional and otherwise at IPO , so these are likely to be very tightly held. Future funding secured.

I am taking great interest here, value catalysts are multiple  most significantly roll out of a proven, market friendly, successful product (a quick google will show the press has been fabulous ), property appreciation, dividend potential...

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